CAG FULL Report on Air India,Civil.

Now we know why BJP is quiet.

Follow the Link for the full report from CAG.

http://saiindia.gov.in/english/home/Recent_Audit_Reports/Recent_Audit_Reports.html

Congress.

Chapter 7 Conclusions and Recommendations

AirIndiahas enjoyed the unique position of being considered the National Carrier of the country.  This is in spite of the fact that there are many other Indian Carriers today who are operating both domestic and international flights.  

  In  spite  of  this  advantage,  it  is  also  a  fact  that  Air  India  is  no  more  the  favoured airline of passengers, both Indian as also International.  The services and criteria that benchmark a favoured and popular airline are perceived to be absent in AirIndia. The discerning passenger who may be a corporate, businessman, tourist or civil servant who has to spend long hours in flight looks for a comfortable, luxurious and salubrious environment. Attentive, efficient, pleasant and courteous service from the crew on board is an added attraction.

The current dismal state of affairs of the merged entity “AirIndia” is a combination of a multiplicity of factors such as: 

x risky acquisition of a large number of aircraft with the intention of vastly expanded operations and “footprint” and also, in the case of the erstwhile AIL,perceivably following a ‘supply response’ philosophy enunciated by MoCA.

x a liberalised policy on bilateral entitlements for international air travel introduced by GoI without affording adequate time to AIL/ IAL to set their houses in order and gear up for a highly competitive environment, & subsequent rights being liberally approved to foreign carriers without any quid pro quo to Indian Carriers. 

x an ill-timed merger undertaken after separate aircraft acquisitions by AIL and IAL were completed, driven from the top, rather than by the perceived needs of both these airlines, with inadequate validation of the financial benefits from such a merger and without adequate consideration of the difficulties involved in integration (notably in terms of HR and IT, among other areas);

x chronic operational deficiencies;

x a weak financial position reflected in a grossly inadequate equity capital and undue dependence on debt funding, providing little or no cushion for the financial shock when it came; and

x external factors beyond the control of AI (high ATF prices, the 2008 economic recession

etc.).